Question 10 Hi-Teeh Products manufactures three types of CD players: Cheap, Econo andDeluxe. HiTech uses an activity-based proth costing system. The company has identied ve activities. Each activity, its cost and related activity driver are identied below. Activity Cost Activity Driver Material Handling $225,000 Number of parts Material Insertion $2,425,000 Number of parts Automated Lilachinery $340,000 Machine hours Finishing $120,000 Labour Hours Packaging $120,000 Orders Shipped Total Manufacturing Costs $3,330,000 The following information pertains to each product line of CD players: Cheap Econn Delnxe Units to be produced 10,000 5,000 2,000 ICIFrders to be shipped 1,000 500 200 Number of parts per unit 10 15 25 Machine hours per unit 1 3 5 Labour hours per unit 2 2 2 Under an activity-based product costing system, what is the cost per unit of Econo (to the nearest dollar)? Correct Answer: e. $222 Under an activity-based product costing system, what is the cost per unit of Cheap (to the nearest dollar)? CorrectAnsw'er: c. $154